AUDIT
Audit human resources includes the strategic actions of an organization aimed at taking an objective look at its policies, procedures and methods of personnel management. Such a comprehensive analysis of the current state of a company can help determine if specific areas or processes are adequate, legitimate, and efficient. The results of this review can help identify gaps in HR practices, and HR can then prioritize those gaps to minimize litigation and regulatory violations and achieve and maintain world-class competitiveness in key HR areas. practices.
Overview
An audit of human resources can help determine if specific areas or processes of the human resources department are adequate, legitimate, and effective. The results of this review can help identify gaps in HR practices, and HR can then prioritize those gaps to minimize litigation or regulatory violations, and achieve and maintain world-class competitiveness in key areas of HR practice. .
Background
HR audit - a vital means of avoiding legal and regulatory liability that may arise from an organization's HR policies and practices. In addition to identifying areas of legal risk, an audit is often designed to provide a company with information about the competitiveness of its HR strategies by learning from the best practices of other employers in the industry. Essentially, an HR audit involves identifying problems and finding solutions before they become unmanageable. It is an opportunity to evaluate what the organization is doing right, as well as how things could be done differently, more efficiently or at less cost.
In today's competitive environment, organizations operate within a highly regulated employee environment. This task involves dealing with many complex laws and regulations. The scope of the HR function includes the creation and administration of a variety of policies and practices, many of which are related to regulatory compliance, that significantly affect the performance and profitability of an enterprise.
With many HR departments understaffed and overwhelmed, many organizations only realize in retrospect the monetary cost of ignoring HR-related legal hot buttons. Failure to comply with applicable laws and regulations involves significant financial risk.
TO MINIMIZE THE RISK,
REQUIRED - PERSONNEL AUDIT
Definition of HR audit
An HR audit involves devoting time and resources to taking a very objective look at an organization's HR policies, practices, procedures, and strategies in order to protect the organization, establish best practices, and identify opportunities for improvement. An objective analysis of an employer's current state can help HR assess whether specific areas of practice are appropriate, legal, and effective. The results can provide decision makers with the information they need to decide which areas need improvement.
An HR compliance audit usually consists of two main parts:
An assessment of the organization's operational HR policies, practices, and processes, with a focus on key areas of the HR department's work (eg, recruitment - both internal and external, employee retention, compensation, employee benefits, performance management, employee relations, learning and development).
Overview of current HR metrics (e.g. number of open positions, time required to fill new position, employee turnover, employee satisfaction, internal complaints filed, number of legal complaints, absenteeism rate).
HR typically conducts audits through a questionnaire that asks for an assessment of specific areas of practice. This document helps the audit team to thoroughly examine all critical areas of the organization's HR practices. The audit may also include interviews or the use of questionnaires to obtain feedback from selected Human Resources employees and other department heads to see if certain policies and procedures are understood, applied, and accepted.
Rationale for conducting a personnel audit
The changing nature of HR requires that HR professionals fully participate and contribute to their organizations as true strategic business partners.
An audit helps an organization understand if its HR practices are helping, hindering or having little effect on its business objectives. The audit also helps to quantify the results of the department's initiatives and provides a roadmap for necessary changes. Audits can also help an organization achieve and maintain world-class HR practices.
Types of audits
HR audits can be comprehensive or focused, subject to time, budget and staff constraints. There are several types of audits, each designed to achieve different goals. Some of the more common types are:
Conformity. The focus is on how well an organization complies with applicable federal, state, and local laws and regulations.
Best practics. Helps an organization maintain or improve competitive advantage by comparing its practices with those of companies recognized as having exceptional HR practices.
Strategic. Focuses on the strengths and weaknesses of systems and processes to determine if they are aligned with the HR and organization's strategic plan. Cm. Participation in strategic planning .
Function dependent. Focused on a specific area of the HR function (eg payroll, performance management, record keeping).
What to check
The decision on what to audit depends largely on perceived weaknesses in the organization's workforce environment, the type of audit, and the resources available. Keeping a log of issues that have arisen but are not covered by the organization's procedures or policies helps identify areas of potential impact that HR can address during the annual review process (if they do not need to be addressed immediately).
However, organizations are particularly vulnerable in certain areas. Most lawsuits involve issues related to recruitment, performance management, discipline, or termination. Some additional risk areas that employers should carefully consider during an audit include:
Misclassification of exempt and non-exempt jobs. Virtually every organization has positions that have been erroneously classified as exempt from overtime entitlement. The complexity of wage and hour laws and regulations makes it easy to misclassify work as exempt work, thereby exposing the employer to liability for past overtime work.
Inadequate personnel dossier. Examination of sample personnel files often reveals inadequate documentation of performance—for example, informal, vague, or inconsistent disciplinary warnings. Performance estimates may be ambiguous, inaccurate, or out of date. Personal health information can often be found in personal files, even though medical privacy laws require that such data be kept separate. Accurate and detailed records are essential for employers to defend any type of employee claim, such as unemployment benefits or wrongful terminations.
Prohibited attendance policy. Controlling excessive absenteeism is a big problem for most employers. However, the complexity of family and sick leave laws, sometimes with conflicting state and federal protections, has rendered many previously acceptable absence control policies unacceptable. Absences affect workers' compensation, family and sick leave, provisions for the disabled, and pregnancy laws. Organizations often have attendance policies that do not comply with relevant laws and regulations, or that provide employees with more protection than required. See Section Employee attendance management .
Inaccurate time records. Employers typically require ineligible employees to strike the clock or complete timesheets showing their working hours each week. The records generated by these systems are usually the employer's primary defense against wage and hour claims, so timekeeping policies and practices must be clearly stated and agreed upon. Cm. Record keeping requirements in accordance with FLSA .
Form errors. An analysis of employer recruitment practices often reveals inadequate documentation such as as missing or incomplete forms. Employers can be fined for each failure to fill out the form correctly. Penalties for these violations can easily accumulate.
When to audit
Given the resources required for a full-scale audit, most organizations will not want to go through this process more than once a year; however, mini-audits to allow for some course correction can be done without much pain in the department about every six months. Scheduling annual checks to maintain the discipline of regular checks is preferable to only periodic or panic checks (for example, those that are only done when a potential problem is brewing). Another strategy is to audit after any significant event (eg new plans, changes in management).
What to expect
A due diligence is a time-consuming and intensely focused project that may require reviewing numerous documents and policies, as well as obtaining feedback from HR, individual employees, and other department heads. The amount of time and effort required depends on the size and type of the organization, the type of information the organization hopes to collect, the scope of the audit, and the number of people on the audit team.
A full-scale compliance audit, in particular, covers a large area and takes longer than a best practice audit, which compares one particular practice to another employer's approach, or a specific function audit, which examines only one key area of an employer's HR practices.
Audit cost
The actual cost of an HR audit depends on the scope of the audit, the number of people interviewed, and the size of the audit team. Consequently, costs vary greatly from one situation to another. Suffice it to say, however, that the cost of conducting any full-scale personnel compliance audit will be far less than defending (not to mention losing) at least one lawsuit or the amount of fines for violations.
Stages of personnel audit: model
Commercial offer, contract signing, payment for services
Drawing up and agreeing on an inspection plan
Familiarization with the personnel documentation of the client, its fixation
Processing and verification of personnel documents
Writing a report, compiling a list of personnel violations
Providing the client with an expert opinion, clarification of issues
After elimination of violations - issuance of a certificate